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ASIC rejects NAB’s defence over rigging claims of BBSW
The Australian 5:39pm December 7, 2016
Ben Butler
The corporate regulator has rejected NAB’s defence to a Federal Court lawsuit in which the Australian Securities and Investments Commission accuses the bank of rigging the key BBSW interest rate benchmark.
In a four-page reply, filed with the court late on Monday, ASIC said it “joins issue with” almost all of NAB’s defence, which accused the regulator of filing a legally embarrassing claim.
ASIC conceded that from time to time the reason NAB’s interest rate desk traded “varied depending on circumstances”.
However, ASIC insisted that on the dates it accused NAB of trying to rig the rate, the desk traded to influence the setting of the BBSW in a way that was favourable to the bank, “and such tracking did not reflect the forces of genuine supply and demand”.
ASIC has accused three of Australia’s big four banks — NAB, ANZ and Westpac — of trying to rig the BBSW, which is used to set interest rates across the economy.
The banks are not accused of conspiring together, as was the case in overseas rate-rigging scandals, but of each individually trying to set the rate at their own desired level.
The cases are set for a joint case management conference this Friday, at which Justice Jonathan Beach is to hear arguments about whether the cases should be heard together and whether a trial can begin on the currently scheduled date of August 1 next year.
In its defence, filed last month, NAB said ASIC’s claim was wrong because its traders lacked the power to move the BBSW market by themselves.
The bank also said there was not necessarily a link between the motivation of its traders and the eventual outcome of the BBSW-setting process.
And it claimed customers who relied on the BBSW rate were not necessarily disadvantaged because they were large-scale sophisticated organisations able to hedge their exposure to the rate.
Westpac and ANZ have also filed defences against ASIC’s allegations.
